Monday, March 20, 2017

The success of Instamojo

Since the last 7months, I’ve been using Instamojo to collect payments for an event which I co-host. Having collected close to Rs ~80,000 over ~300 transactions(average ticket size is around 160, skew due to one-off Mar-17 event), my experience of the platform has been that it delivers what it promises- an inexpensive, swift, efficient way to collect payments for various purposes(in my case, events). Why do I like it so much, or prefer this to UPI/direct account transfer? Preregistration for events is helpful to build seriousness and minimize dropouts- while Prepayment for events builds a trackable database, and lowers credit risk and operational cash issues, so that you can focus on enjoying the event rather than on who has paid(or not). Besides, while in our case, even Rs 150-200 is a pittance actually, this lowers the odds of overplanning and wasting food/resources.

1.       Sleek and elegant web UI-Easy for payments and vendors
2.       Only option I could locate for individuals(non registered entities) which allows you the full payment gateway functionality
3.       Allows to collect fields beyond name/email/mobile-this can be used to pre-qualify people during signups, and update the database. No need to seek and update spreadsheets
4.       Protects your and the payor’s payment information-neither party is aware of the source or recipient payment method.
5.       Allows different variants and discount codes-useful for price differentiation
6.       Excellent reporting interface, downloadable 24*7
7.       Avoids payment hassles for you and various options for those who need to pay you-no more frequent logging into bank account to check who paid out
8.       Instant receipt-allows confirmation to those who paid that their funds are safe
9.       Easy refunds without time limit-useful if you cancel the event OR issue a discretionary refund.
10.   Premium options for SEO etc which I have not used.
Some things which could be better
1.       Micro Loans on T+1 at 0.25%-This might give a perverse incentive to delay payments
2.       Better Wallet Integration-They don’t have PAYTM for example, and till recently used to charge money for even offering this facility
3.       Mode of payment/Device Type meta data-this could be provided in the payments dashboard for vendor to analyze better his customer profile
4.       Not passing on TDR/MDR benefit from RBI-In the months RBI lowered the transaction charges, they could have reduced it for end customers also. But they chose not to affect the standard pricing, thus demonstrating their pricing power. Not kosher!
For all this, paying Rs 3+1.99%(+service tax) is totally worth it even though it works out to 3.5%-4.0% of my overall proceeds. But considering the time it saves me, it is totally worth it.
Kudos to the team and to their backers(their website includes names like  Kalaari Capital, Blume Ventures, 500 Startups,  Rajan Anandan, Sunil Kalra, Dave McClure, Rob de Heus, Thijs Gitmans, Pankaj Jain,  Shailesh Rao, Bharathram Thothadri, Avlesh Singh.)

PS: This is purely a review without any commercial or other benefit from the gateway.